GAGE UNIVERSITY COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF

MASTERE OF BUSINESS ADMINISTRATION

Assessment on Budget Implementation and Controlling: Case of

Addis Ababa City kirkos woreda Administration Finance and Economic
Development

YESHEWA ALAMIR

A RESEARCH PROPOSAL SUBMITTED TO THE SCOOL OF POSTGRADUATE STUDIES

IN PARTIAL FULFILMENT FOR THE AWARD OF DEGREE IN MASTER OF BUSINESS

ADMINISTRATION OF GAGE UNIVERSTY COLLEGE

May, 2023

Addis Ababa

Ethiopia
Declaration

I, the undersigned, declare that this research project is my original work and has not been
presented for a degree or other award in any other university.

Signed: ……………….. Date: ………………….

Yeshewa Alamir Asmare

I confirm that this research project has been carried out by the candidate under my supervision

Signed: ……………………. Date: ……………….

Mr. Yohans (Prof)

Lecturer

Department of masters of business administration

School of Business administration

Gage University

OPERATIONAL DEFINITION OF TERMS

Budgets:- A quantitative financial plan of action that is prepared by an individual or

organizational entity in advance of the period it is covering. It is an expenditure plan based on
expected sources of income for the period.

Auditing Processes:- This is a process of systematically and independently examining books of

accounts and related financial documents to determine whether they present a true, fair, and
objective assessment of the financial position of an organizational entity, whether in the public or
private sector.
Budget Implementation:- This is the execution phase of budgeting and entails allocation and
utilization of financial resources to planned expenditure activities.

Budget Planning:- This is the process by which county Governments evaluate their revenue
(from National Government, Local revenue and support from donors) and expenses (both
development and recurrent expenditure) and project their monetary incomes and expenses in the
next financial year.

Budgetary Staff Capacity:- This is the human capacity and skills required to prepare the county
Government Budget:- The knowledge potential of available staff on budget preparation and
monitoring of budget implementation.

Financial Resource Availability:- County Governments sources of funds include: County local
collections in form of taxes and charges, Equitable share between national and county
governments, Conditional grants which are additional funds from national government on
equitable share of revenue, loans from external sources and private lenders, donor funding which
is aid from international donors.

Financial Performance:- This is the degree of a firm’s overall health over a specified duration. In
the case of country government, the allocation from the national government, the efficiency in
collection of local revenue and the expenditure allocation of expenditure into development and
recurrent expenditure

ABSTRACT

The study assessed budget implementation and controlling practice in the case of Addis Ababa
city kirkoss woreda the study was descriptive in nature in order to examine the status, practice
and problems by using mixed research approaches.

Resources are scarce. Public and private entities must ensure that available resources are
allocated efficiently and utilized for the intended purposes in order to achieve strategic
objectives. This study investigated the effect of budget implementation on financial performance
of kirkos wereda Addis Ababa city. This study was grounded on three theories: the theory of
public finance, the budget theory, and the decentralization theory. A descriptive research design
was used to guide the investigation of the stated objectives. To achieve the objective of the study
data was collected from employee of the organization using close ended and mixed items
questionnaire and unstructured interview as well as data from annual reports and manual of the
organization. Descriptive statistical techniques were used to compute the percentages, means
and standard deviations. .Data were presented into table, graphs, and charts both percentage
and slandered division research techniques were used during analyzing the data. Accordingly,
the result of the study revealed that budget implementation and controlling system of the
organization is affected through several factors such as, lack of lower level management
participation on budget preparation of the bureau time delay in the approved budget,
underutilization of the estimated budget, time delay in reporting budget variance, lack of higher
officials monitoring and evaluation system. Overall, the results of the standard division analysis
revealed that all of the identified determinant factors positively and significantly.

Standard division with the organization budget implementation and controlling system. Based
on the findings the study is recommended, that, it is better to participate lower level
organizational management in preparations of the organization budget and communicate
strategic plan for all, to avoid underutilization of budget in the organization, it is better to see
the previous years’ experience.

Acknowledgement

First of all, I would like to thanks my almighty God for his great support to accomplish this
research work and for his infinite support in my entire life success. Secondly, I would like to
express my advisor thanks to Yohannes ( Prof) for his constructive comments, valuable
suggestions and excellent guidance throughout this thesis. I am grateful to the staff of the
kirkos woreda Finance and Economic Development Bureau for their support in directing me
during the data gathering process and for their unreserved cooperation. In addition I would
like to thank all the people who support me by giving different materials and for their idea
sharing to complete this study, special thanks goes to all of those organizations, particularly
kirkos woreda Finance and Economic Development Bureau and who were very cooperative in
providing the necessary data and documents by sacrificing time to fill the questionnaire.
 CHAPTER ONE

1. Introduction

This thesis study presents the assessment of budget implementation and controlling in Addis
Ababa city kirkos woreda of finance and economy development Bureau. This chapter tries to
cover the background of the study; budget cycle, a statement of the problem; objective of the
study; research questions; significance , scope and limitation of the study.

1.1 General Background of the study

Budgeting is a plan of resources which is available to a person or an organization and how it was
spent over a particular period.

Budget is a planning process that involves making decision under condition of uncertainly and
has consequences for period of time.

Budget is a document or financial plan of any organization be it government, non- government or

private institutions. In all of the above type institutions, budget is used for allocating scarce
resources among the different priorities of programs or activities. It consists of both revenue and
expenditure. There are different ways of budget management practiced by the different types of
organizations. Budget is central to realizing the national objectives, goals and programs linked to
the role of government or public institutions in financial matters.

To achieve this, Ethiopia reformed the budget since 1996 E.C structure under the government’s
civil service reform program with the intention of changing the process and structure of
budgeting with aim of improving budget management and implementation within the
government body. The process of the reform is about how budgeting is done whilst the structure
is what should be done. There are several new elements in the reform such as new chart of
accounts, budget classification system and coding of budget transactions for an activity that
should fit with the accounting system and new formats.

Annual summary of revenue and expenditure /Annual account/ is a financial statement of a

single economic entities composed of several legal entities, funds and account groups in one
statement. It is the annual report required by the Government Accounting Standard Board to be
prepared by every governmental entity as a matter of public record.

Annual summary of government revenue and expenditure annual report is to review annual
report concerning the government receipts and expenditures, assets and liabilities as well as the
financial statistical data and submits auditor comments there on to the House of Peoples
Representatives, expenditure classification and the presentation of the expenditures in the budget
require special attention in budget and policy formulation. Equally important is the approach to
design different programs that aim at public service delivery.

Basically the task of budget allocation is simple: allocate funds among government programs
until an additional dollar moved to any program yields an additional return to society equal to the
return lost from the program from which that dollar was taken. That is the public sector
equivalent of the familiar resource allocation rule for profitability in business operations. The
beneficiaries of the various government programs do not often the same people. Hence, the
simple public program allocation rule may only be a glimmer in the politics of budget policy.
Nevertheless, the budget process is where choices get made from among program alternatives.
Some budget classifications may make the allocation choices more likely to improve conditions
of society.

1.2. Budget Cycles in the bureau

This cycle or system ensures greater accountability for decisions. It also allows decision makers
to modify the budget for efficiency and effectiveness. The budget cycle has three phases:
executive preparation, legislative approval and budget execution. The budget execution: at the
beginning of the fiscal year, bureaus carry out or execute their approved budget. Spending is
monitored by the bureau and the executive budget office in order to ensure that appropriations
are not overspent. This was usually done through these of accounting software that is designed to
ensure that spending is within authorized amounts. Monthly, quarterly, and midyear budget
reports were issued to that provide comparisons between actual revenue received to date and
revenue projections actual expenditures compared to appropriations. If revenue projections were
off the target, modifications should be made to ensure that the budget is balanced. Budget short
falls can cause serious operating and personnel problems for bureau heads. A weak budget
system and a poor budget choice aggravate social problems. More over even, where budgets are
allocated to reach the poor and vulnerable groups, the funds may not reach the intended
beneficiaries due to weak expenditure program/financial management and corruption. All are
these factors justify the need for effective budget management (mathur.1997).

1.3 Statement of the problem

The planned budget should guide by the period of time chosen for future budget. Budgets are
prepared for material needed, to purchase raw material /for Manufacturing firms/and for
material known the desired levels of inventories. In developing budgetary process,
recognition must be given to board of directors or higher officials the organization
In recent times, kirkos wereda finance and economic development bureau have performed
poorly due to that they lack effective and efficient budgets implementation and budgetary
control systems to adequately allocate resources to meet the goals and maximize the
performance of the bureau.

Kirkos wereda finance and economic bureau recognize they need to have a well-developed and
comprehensive budget implementation and controlling system in order to minimize budget
variances and maximize efficiency. It is common knowledge that Public utilities in are not
performing up to the expectations for which they are established.

The fact that mostly they are run how much budget allocated from governments rather than out
of the result of their performance has given rise to the problem of hiding inefficiency in these
buearo of finance.
Budget is basically used to prepare plans on how to go about its future operations and as a way
of assessing the performance of the buearo of finance, through making comparisons of actual
results against budgeted results

According zelalem (2014) the critical challenge and controversial issue related to public
budgeting is reflected in the budget preparation, approval, implementation and controlling stage
of the budget cycle.

Lack of budgets in planning and control has required in the indiscriminate use of fund meant for
more viable activities, budgetary goals are not realized due to low level of understanding of the
budget system by middle and low level of management staff.

The bureau of the finance and economic development needs to bring rapid and sustainable
economic development in budget performance. Therefore the research concentrated on the
assessment on budget implementation and controlling in Addis Ababa kirkos woreda
administration bureau of finance and economic development, in this situation the study
attempted to fill the knowledge gap by assessing on implementation and controlling system in
enhancing the performance budget utilization and controlling in buearo of finance.

1.4 Research Questions

A. What are the challenge budget implementation and controlling?

B. How to integrate plan with budget Bureau of finance?

C. How budget utilized and controls in the Bureau of finance?

D. How does Bureau of finance perform auditing for the allocated budget?

E. Does the budget implemented according to their plan?

F. Have a budget deficit? What are problem of budget deficit?

G. Does variance occur of the budgeted amount and actual?

H. How does the budget controlled and monitored?

1.5 Objectives of the study

1 .5.1 General objective

The General objective of the study is to assess the budget implementation and controlling
practice Bureau of finance in kirkos woreda

1.5.2 Specific objective

 To assess the integration of planning and budgeting
 To assess the reason for mismatching of the budget and plan
 To examine budget utilization and controlling in Bureau of finance, and
 To see how auditing is performed in Bureau of finance for Allocated Budget
 Identify factors that affect budget implementation and control system
 To identify problems of budget deficit.
 To examine factor that hinder the effective budget.
 To investigate any variance of the budgeted amount and actual.
 To assess the budget implemented according to their plan
 To investigate how the budget controlled and monitored

1.6 Significance of the study

As far as the significance of the study is concerned the following importance.

 Initially, the primary importance of this study was used for understanding the actual
practices of integrations of budget and plan, utilization and controlling of the budget in
beuro of finance kirkos wereda.
 After this research, the next beneficiary will be the society, which is the final consumer
from fair distribution of the resources.
 It supports to the budget problem faced by the organization result are unsatisfactory.
 It strength public about budget process and budget implementation.
 and help the management to make corrective action and improve efficiency when actual
 Finally, the researcher develops their ability to dig out the problems and providing
recommendations as well as other readers or researchers may be benefited from this
research paper.
1.7 Scope of the study
The study was investigating current budget implementation and controlling practice of the
organization of policy and explore major factor affecting effective budget utilization of the
organization and also users of that have under control by office of finance. It will gives emphasis
on integration of plan and budget, problem of action taken on the audit findings , timeliness on
annual report and performance of auditing on allocated budget for the finance bureau.

The study addresses the nature of budget with a relative steps. Budget control is over view in
relation to budget process.

To get a real process of budget sampling assess the government budget utilization and control
mechanism and also sampling some sector, the study is limited only to in case of kirkos woreda
finance office.

1.8 Limitation of the Study

In preparation of research paper the researcher fused the following limitation:

 Financial constraints.
 Limitation of time.
 Unwillingness of some respondents.
 The unwillingness of some respondents to give the necessary information and answer for
the questioners on time.
 Budget constraint.
 Lack of available and organized secondary data
 Limited access, it was not easy to get all relevant information from respective offices.
 Lack of research studies and availability of sufficient current literature on the topic
 CHAPTER TWO

2. Literature Review

2.1. Introduction
This chapter tries to see the analysis of the existing knowledge and other researchers‟ works
from library, different websites, research papers and other documents in order to know the
concept of budget, budget approval, budget implementation and budget control and some
empirical literatures are discussed.

In this part, assessment of related theoretical literature from different books written by different
scholars on the basic concept of the government budget implementation and controlling was
presented to identify and analysis documents consisting of information associated with the
research problem being investigated.

2.2. Theoretical literature review

The study is grounded on three theories: the theory of public finance, the budget theory, and the
decentralization theory.

2.2.1 Definition of budget

The Dictionary of Oxford English defined the word budget as a plan how to spend an amount of
money over a particular period of time, the amount of money that is mentioned.

Budget is planning document which is created before anticipatory transaction occurs.

The events while the secondary of budget is to develop information that is as accurate and
meaningful primary objective of budget is to forecaster the future financial to non-financed
transaction and to the receipt as possible. To accomplish these objectives a budget should present
information in an ordinarily manner.
Budget is the common accounting table that organizations use for planning and controlling what
they must do to fulfill their goals.

Budgeting is the process of creating a plan to spend your money. This spending plan is called a
budget. Creating this spending plan allows you to determine in advance whether you will have
enough money to do the things you need to do.

Government has several policies to implement in the overall task of performing its functions to
meet the objectives of social & economic growth. For implementing these policies, it has to
spend huge amount of funds on defense, administration, and development, welfare projects &
various other relief operations. It is therefore necessary to find out all possible sources of getting
funds so that sufficient revenue can be generated to meet the excepted expenditure.

Budget is most important information document of the government; one part of the government's
budget is similar to company's annual report. This part presents the overall picture of the
financial performance of the government. The second part of the budget presents government's
financial plans for the period up to its next budget. So, every citizen of a nation from the
common man to the politician is eager to know about the budget as they would like to get an idea
of the:-

1. Financial performance of the government over the past one year.

2. To know about the financial programs & policies of the government for the next one year.

3. To know how their standard of living will be affected by the financial policies of the
government in the next one year

2.2.2 Advantage of Budget

Budgets are brief parts of most management control system, when administrated wisely; a budget
has the following advantages.

1) Compels strategic planning.

2) Provides a frame work for judging performance.

3) Motivating managers and employs Promotes coordination and communication among sub
units within the organization.

2.2. 3.Budgeting Process

The budget process has 4 (four) phases:

1) Preparation
Refers to estimating revenue and deciding how much to spend for what purpose.
2) Legislative Enactment
The approval budgeting is made by responsible authority.
3) Administration
Checking to see what the approved budget is being adhered to.
4) Reporting and letting the responsible authority (body)
To know the result of budget’s post audit examination of the transaction and events which
have already occurred on which report is based.

Budget process provides a base for:

1) Coordinating and implementing the problems

In large and diverse organizations, the problem of coordination becomes critical and
important roles. The coordinated plan or budget provides a blueprint for implementation and
control.
2) Motivating the organization members to perform well
This is generally associated with reward and punishments rather than with budgeting. A
budget also plays a potential role in motivation because of the fact that its goal properties
and goal setting is related to performance. If budget is used properly, it can as performance
goal and therefore it can be a significant factor in motivation.

3) Control and maintaining control over the activities occurring within an organization is a

The purpose of budgets in managerial control is to specify the level of acceptable performance
and understand in of organizational goals comes during the development of the budget as each
management his/ her organizational unit. Strategy is originally a Greek word coming from the
military origins. Over the years, marketing strategies have served as the fundamental
underpinning of marketing plans that are designed to fill market needs and reach marketing
objectives. Today, marketing is the biggest paradigmatic shift in marketing theory and practice,
but marketing cannot be discussed without considering market performance and customer
satisfaction. Marketing strategy can be illustrated as an action of analyzing the business
environment to understand specific customers need, internal and external, matching activities or
products to the customers’ segments and implementing programs that achieve the goal of the
company. Marketing strategy includes all basic and long-term activities in the field of marketing
and thus contributes to the goals of the company and its marketing objectives. According to
Lewalski (2008), marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives.

2.2. 4.Type of budget

Government budget basically classified according to the characters of the organization in such
situation there are two types of budget; recurrent and capital budget

2.2.4.1. Recurrent budget

A recurrent budget tracks ongoing revenues and expenses that occur on a regular basis, be they
monthly, quarterly, semiannually, or annually. Also known as an operational budget, a recurrent
budget includes line items such as wages, utilities, rent or lease payments, and taxes. It also
includes purchases that are expected to last for less than a year, such as office supplies. A
recurrent budget can help a company manage its money and come up with strategies for cutting
day-to-day costs.

2.2.4.2 Capital budget

A capital budget is used to evaluate potential investments or expenditures for specific projects or
purposes. When a company draws up a capital budget, it is typically doing so to determine
whether it makes financial sense to acquire a specific asset.
Capital budgets cover purchases that are expected to last more than a year. The amount a
company spends on such purchases is known as a capital expenditure.

When a company creates a capital budget, it is usually with the goal of growing the business or
increasing its value in the long run. However, the benefits of acquiring new purchases or
pursuing special projects must be weighed against the costs involved.

2.2.5. Budget Preparation

Maitland (2001) mentions that the process of preparing and agreeing on a budget is a means of
translating the overall objectives of the organization into detailed, feasible plan of action. Public
budget preparation is one of the tedious tasks that any country should look upon; the preparation
process for the annual budget involves a great deal of energy, time, and expense. Hence, it is
important that a country must be able to follow accurately all the methods of preparing an annual
budget. In budgeting, the focus is not only to prepare the budget, but more importantly to have a
follow-up operation for budgeting and to act according to known data.

Falk (1994) states that budgets are financial expressions of a country’s plan for a period of time.
It tells where and how the organization will spend money and where the money will come from
to pay these expenses. He adds that budgets set limits.

Besides setting limits, Andrews and Hill (2003) say that budgets also provides the assurance that
the most important needs of a country are met first and less important needs are deferred until
there are sufficient funds in which to pay for them. Even though budget preparation is not the
sole thing that needs consideration in budgeting, the basis of it is still needed in order to have at
least close estimation.

Preparing a budget proposal that suggests a set of recommended policies and stays within
whatever financial limits are considered politically realistic has been a prominent issue in public
budgeting Bunch and Strauss man (1993).
One approach is to set specific dollar ceilings on budget requests. This approach has the distinct
advantage of making agencies prepare requests that include only financially feasible options Lee
(1992). This method is often called fixed-ceiling budgeting.

Budget ceilings instruct agencies to request next year's budgets based on certain assumptions,
such as their set of priorities regarding rankings. Another approach is for the governor to provide
policy guidance in terms of overall priorities and/or guidance by major program.

According to Schiavo-Campo and Tommasi (1999) and Allen and Tommasi (2001), the Main
starting points for the preparation of the annual budget should be a clear definition of fiscal
targets and a strategic framework consisting of a comprehensive set of objectives and priorities.

2.2.5.1. Importance of Budget Preparation

The preparation of an organization

1) Preparing budget forces the management to look plan both long term and short term goals.

2) Entire management team works together to move and carry out the plan.

3) By comparing the budget with actual results it is possible to review performance of all levels
of management

2.2.6. Budget Utilization

Once a budget has been approved by the legislature, the government embarks on the challenging
task of spending funds. Utilizing public funds effectively to meet stated policy objectives while
ensuring value for money is often just as challenging than planning how to spend it. Several
reviews of Public Financial Management performance in developing countries show that
countries score significantly better on budget preparation than on budget utilizing. According to
Schiavo-Campo and Tommasi (1999) budget utilization is the phase where resources are used to
implement policies incorporated in the budget. As they argued, it is possible to utilize badly a
well-prepared budget; it is not possible to utilize well a badly prepared budget.

As per Allen and Tommasi (2001), successful budget utilization depends on numerous factors,
such as the ability to deal with changes in the macroeconomic environment, and the
implementation capacities of the agencies concerned. Besides to this, the budget system should
assure effective expenditure control. In addition to a realistic budget to begin with, a good budget
utilization system should have complete budgetary/appropriation accounting system. It is
necessary to track transactions at each stage of the expenditure cycle (commitment, verification,
payment) and movements between appropriations or budget items Schiavo-Campo and Tommasi
(1999).

2.3 Empirical literature review

Empirical studies will touch on budget implementation practices including budget planning,
budgetary staff capacity, financial resource availability and audit processes on county financial
performance.

The empirical study concerns on prior academic research on the assessment of budget
implementation and controls practice. In this case there are certain empirical studies undertake
by different researchers related to the budget preparation, implementation and controls discussed
in the following.

As Darak and Fabozzi(2010) regardless of size, complexity or sector, government relies heavily
on budgets and budgetary systems to succeed strategies goals. The success of budgeting relies on
the ranking of organizational goals, sharing of responsibilities for achieving these goals and
consequently its implementation.

According to Turyakina (2004) pointed that, budgets play a highly important role in performance
evaluation. Attaining corporate objectives is per amount to success. Performance of any
organization is often evaluated by measuring success in meeting the budget objectives. When
budget is successfully implemented and executed will enable realization of company objectives
and once this has been done the organization is said to have achieved at performance level. Thus,
efficient budget management is important for smooth performance of any organization financial
control over inputs. It is also instrumental for allocating scarce resources to government priorities
so that government objectives are achieved in the most efficient and effect manner (Bradley,
1968).
Doreen(2014), conduct a study effectiveness of budgeting process in achieving organizational
goals in the case of Tnazanian electrical mechanical and electronics service agency using case
study research design strategy with objective of investigating how budgeting process helps
organization in achieving its goal. Researcher concluded that the role of budgeting process that
make an organization attains its goals should be effective by having active support for budgeting
process from top management.

According to Getachew (2006) conducted a study on the analysis of medium term expenditure
planning and budget allocation in Ethiopia stated that, even though there have been several
attempts to address the weaknesses of the Ethiopian budgetary system and try to resolve conflict
between annual budget perspectives with medium term planning horizons, successful modern
budgeting system remains a continuous problem of the country.

The main aim of the research was to enhance understanding on the government budget
preparation, budget approval, budget implementation and budget control related to kirkos
wereda. The study concludes that there is a problem in preparation of medium term expenditure
planning and Priority setting was not according to the national and regional objectives. The
legislature did not make any serious deliberation and has no influence in the priority setting of
the budget. With regard to the budget implementation, even though the public sectors preparing
the action plan for purchasing of goods and services it is not practical operational. Finally the
researcher identifies that there was no well qualified and professional auditor. Most of the time
sectors were not audited on time. The audit standards like professional skills, and independence
were not properly functioning.

The aim of the study was on the process by which military budgets are developed, implemented,
recorded and monitored. The researcher concluded there are inefficiencies in budget
implementation due to shortage of experienced man power, poor application of policy and
procedures, lack of monitoring budgeting timely of government.

Yimer (2011) did a study on evaluation of budget practices of Ethiopia in comparison with two
east African countries. The aim of the study was to assess similarities and differences between
Ethiopia and two east African countries with respect to budget practice and procedures. The
researcher concludes that the general public in Ethiopia cannot significantly involve in the
country budget process and citizens have no access to monitor and evaluate the budget
performance. Factors that limit citizens‟ participation in the budget process are limited
accessibility to budget information; budget language and country population. Lack of
involvement of citizens in the budget process would minimize a way of improving budget
formulation, efficiency in resources allocation and better oversight of the budget process.

There is a legal stand for transparency such as the constitution however, budget information is no
available for citizens in accessible, timely and clear and easy to use manner. Government has a
duty to make an effort to increase budget transparency because; it allows citizens to properly
assess government financial position and performance. Scarcity of budget information might
decrease the level of public participation in the budget decision process.

The objective of the study was identify the best way how to us public resources.

The findings of the study were shortage of professionals and vacant positions are waiting for
professionals and employee’s turnover, because of unattractive salaries of employee, there is
frequent turnover of employee, there is also improper use of resource in the long run and
problems in budget control. The researcher recommends controlling the performance of various
activities; the audit system has to be strong for effective budgetary control and avoided improper
use of resources in the long run.

A self-administered questionnaire was distributed to respondents, secondary data collected from

budget performance reports and manuals.

The study used both qualitative and quantitative research approach. As the findings show, the
overall budgeting system in the sample organization missed the participation of staff in budget
development helps to achieve the purpose of budget such as coordination, communication and
motivation in the process of achieving the expected performance level. The study recommend
that finance department should keep reporting budget verses actual expenditure to support the
monitoring to revenue and expenses levels in the operating activities and conducting budget
review meetings.

Darge(2018) conduct a study on the impact of budget and budgetary control system on
effectiveness of public organization in the case of west wolega zone finance and economic
development office using descriptive statistics on his thesis in Addis Ababa University. The
researcher concluded based on the response of the questionnaires obtained from respondents
concerning budget monitoring and control again there are no regular budget meeting to review
performance in the organization. There is no good budget performance evaluation and budget
holders give less attention for budget participation in the organization. the main problems of the
Ethiopian budget process systems were:

1. Lack of proper medium term perspective;

2. Lack of properly integration of capital and recurrent budget;

3. The head of public bodies did not give much attention for preparation of budget;

4. Budget doesn’t give incentives for efficiency;

5. During budget utilization performance measures is not applied;

6. The relationship between budget and macro-economic policy framework is insufficient;

7. Preparation of budget based on unreliable data and estimation;

8. The budget system was ineffective to ensure financial accountability; and

9. Involvement of stakeholder and Political commitment in the budget process are limited.

According to Bourne (2004), Cranfield. University in 2001 teamed up with Accenture's finance
and performance management service line to undertake a large worldwide review of planning
and budgeting. They focused on 15 companies in the US and Europe which had already made
adjustments to their budgeting practice. In addition, the researchers reviewed over 100 academic
and practitioner books on the subject.

The result showed a widespread dissatisfaction with the budgeting process (Bourn

According to Afemikhe (2003), these three elements of value for money can be described for
budget controls and implementation as follows:-

A. Economic is the practice by management of the virtues of thrift and good housekeeping. An
economical operation acquires resources in appropriate quality and quantity at the lowest cost.
B. Efficiency is making sure that the maximum useful output is gained from the resources
devoted to each activity, or alternatively, that only the minimum level of resources are devoted to
achieving a given level of output. The efficiency of an operation could be said to have increased
if either lower cost were used to produce a given amount of output, or a given level of cost has
resulted in increased output.

C. Effectiveness is ensuring that the output from any given activity is achieving the desired
results. There is, therefore, the need to establish that the desired goals are being achieved in order
to evaluate effectiveness. The type of interrelationship among these three elements is that all of
them must be in place before the assessment of value for money can be complete. Right things
must be done, using the right method and at minimum cost. For instance, as much as
effectiveness is linked with the achievement of set objectives, it is also important to expect that
the objectives are achieved by the application of the right methods that is, efficiency.

The use of sledge hammer to kill a housefly, though effective is not efficient. The application of
value for money concept to auditing leads to the concept of Value for Money (VFM) audit. It is
applicable to both the private and public sector, but more emphasis has been placed on its
application to the public sector. It is related to the extent to which funds are spent economically,
efficiently and effectively. It is also referred to as Comprehensive Audit or Efficiency Audit.
Turyakina (2004) pointed that, budgets play a highly important role in performance evaluation.
Attaining corporate objectives is per amount to success. Performance of any organization is often
evaluated by measuring success in meeting the budget objectives. When budget is successfully
implemented and executed will enable realization of company objectives and once this has been
done the organization is said to have achieved at performance level. Thus, efficient budget
management is important for smooth performance of any organization.

In a study, Douglas (1994) used a case study approach and found that budgeting places high
importance on budget-actual- comparison for performance evaluation purpose; both at corporate
and subordinate levels. Moreover, there are other factors that influence motivation to perform;
participation in the whole budgeting process that is involvement of all employees, from
subordinate to corporate level in preparation of budget. Budgeting and budgetary control mainly
forms and give an organization the structural support to achieve its goals and objectives and
maximizing performance through effective resource allocation.
A study by Joye and Blayney (1990) found that budget variances were used by 93% of
respondents for setting goals and evaluating performance by Australian firms.

Guilding et al. (2000) found that accountants in New Zealand and United Kingdom tend to see
variances from budget as being important and performance appraisal was based mainly on
budget achievement.

According to Joshi et al. (2003), examines budgetary planning, control and performance
evaluation in developing countries. A questionnaire survey of 54 medium and large sized firms
including both listed and non-listed firms was conducted. His findings revealed that most of the
firms prepare long-range plans and operating budgets, and use budget variance to measure
performance for timely recognition of problems and to improve the next period’s budget.
Moreover, findings showed that the main purposes of budgeting in most companies are to:
maximization and the control performance by investigating variances. Poor cooperation and
ineffective planning are the main reasons for not achieving the required standard targets.

2.3.1 Research Gaps

Different scholars were discussed in the theoretical as well as empirical literatures in order to
identify government budget implementation & controls in the public sectors. In many developing
countries, including in Ethiopia different researches were conducted in the medium term
expenditure planning, budget allocation, budget implementation and auditing and also to some
level of extent stated. Those studies have a drawback in showing how government budgets are
implemented in public sectors; to examine the linkage between public sector's plan and budget
and to identify the major challenges faces in the budget implementation of the public sectors.
2.4. Conceptual Framework

Budget Planning

*Participatory
*Communication
*Accounting system

Budgetary Staff Capacity

*Skilled staff

*No of Personnel
FINANCIAL
*Training and Motivation of staff PERFORMANCE
*Budget efficiency

Availability of Financial
Resources

* Central allocation

* Local collection

* Grants/Aids
Legislative framework
* Borrowings
Intervening Variable
Audit Processes

* Audit Committee *Transparency

* Compliance with rules

Figure 2.1. Conceptual Framework
Source (Researcher, 2023)

The conceptual framework represents the relationship between budget implementation

dimensions and financial performance at the County government. The independent variables are
budget planning, budgetary staff capacity, availability of financial resources, and audit processes.

2.4.1. Budget Planning

Budget planning deals with whether the public and employees participate in the planning
process, there is effective communication, the IFMIS accounting system is utilized, development
priorities are set, and adequate identification of revenues and expenditures. These dimensions of
the variable are captured in the framework as: public participation, efficiency of communication
and accounting system, and setting up of priorities.

2.4.2. Budgetary Staff Capacity

Budgetary staff capacity focuses on the personnel. It was measured by testing whether the
county government had adequate accounting personnel, the presence of training and
development programs, and the capacity of personnel in terms of skills and capabilities. Thus,
the dimensions are captured in the conceptual framework as staff skills, capacity in terms of
number of personnel, and training and motivation.

2.4.3. Financial Resources Availability

Availability of financial resources is central to the implementation process. The dimensions
captured under the variable were central government allocation, local revenue collection, grants
and aid, and loans. These dimensions test the level of dependence on national government
allocation, local revenue collection at the county level, as well as other sources of finances that
can allow the county to fund its budget implementation process.

2.4.4. Audit and Oversight Processes

Audit and oversight processes provide control over both revenue collection and expenditures at
the country level. The study was interested in determining the nature of the Internal Audit
Committee, its functions and responsibilities, its composition and level of staffing, and the
efficiency with which it carries out its responsibilities.

2.4.5. Financial Performance

Financial performance was determined through budget efficiency. The dimensions of budget
efficiency entail determining the extent to which the county government was in compliance with
the legal statutes, the trends in expenditures and revenues, budget absorption and effectiveness of
the accounting system deployed at the county level.

CHAPTER THREE

3. Research Methodology

3.1 Introduction
This section states what was really performed and how the study was accomplished describing
the type of the research design used and procedures chosen for collecting data & making analysis
together with the reasons behind their application in detail as well as in practical terms.

3.2. Research Design

Research design is the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in procedure (Kothari,
2004). A research design used to structure research setting, sample, data collection strategy,
measures and methods of assignment in order to answer the research questions (Trochim, 2005).

In this research, a descriptive survey method is used with the intention to get the general picture
of the current status of budget preparation, implementation and controlling practice Sub Cities of
Addis Ababa in kirkos woreda order to fill the research gap..

Cooper and Schindler (2003), in addition, descriptive research is purposed to the description of
the state of affairs as it exist. The researcher therefore, preferred this method in order to get the
best advantage of the approach by providing the descriptive feature of the factors in seeking
preparation, implementation and controlling of budget practice in Sub Cities of Addis Ababa. In
relation to this Creswell (2003) indicated that employing both qualitative and quantitative
methods together are preferable because using both enable researchers to validate and confirm
the data and discover something that would have been missed in using either of the approaches
alone.

A research design refers to assess the budget implementation and controlling practice in Addis
Ababa city in kirkos woreda administration of finance Bureau.

3.3 Research Approaches

Research approaches are mechanisms of attaining research objectives. The approaches are
Adopted to achieve the best possible of the research objectives. Research approaches are also
adopted based on the feasibility of the selected approaches. The common research approaches
are quantitative, qualitative and mixed research approaches.

Quantitative approach uses surveys of cross-sectional or longitudinal using self- administered

semi structured questionnaires or structured interviews for data collection, with the intent of
generalizing from a sample to a population (Babbie, 1990).

A qualitative research approach uses strategies of inquiry including narratives, ethnographies,

case studies, observations, interviews, and the results are communicated subjectively through
descriptions using words rather than numbers (Creswell, 2003). Moreover Qualitative
researchers tend to use open-ended questions so that Participants can express their views.

Under this method contact with the field of research may be based on interviews, observations,
or analysis of documents and other artifacts. In addition, literature studies are performed to the
extent required to develop sensitivity in observation and interpretation (Atkinson and
Hammersley, 1994).

Finally, a mixed methods approach is one in which the researcher tends to base knowledge
claims on pragmatic grounds (e.g., consequence-oriented, problem-centered, and pluralistic). It
employs strategies of inquiry that involve collecting data either simultaneously or sequentially to
best understand research problem (cress well, 2009).
The data collection also involves gathering both numeric information (e.g., on instruments) as
well as text information (e.g., on interviews) so that the final database represents both
quantitative and qualitative information. The advantage of a quantitative research approach may
be limitations for a qualitative approach and vice versa.

Mixed research approach, is supposed to tap the limitations of quantitative and qualitative
approaches, bases on pragmatic knowledge claims (Sale et al, 2002). The goal for researchers
using the mixed methods approach is to draw from the strengths and minimize the weaknesses of
the quantitative and qualitative research approaches by combining them (Carrie, 2007).

3.4 Research Methods Adopted

This study uses both quantitative and qualitative approaches. According to Creswell (2003) each
approach has limitations which are possible to be minimized using the combined research
approach. For example quantitative approach may cause bias in reliability of findings because of
the nature of research problem, non-representativeness of sample or the nature of questionnaires
that predicts clue. In addition it is difficult to minimize the impact of human behavior using
quantitative approach. Joseph (2006) justified that qualitative techniques can increase a
research’s depth of understanding of the phenomenon under investigation. Qualitative approach
is exploratory and flexible in nature to identify problems that are affected by human behavior.
Regardless of the above advantage, qualitative research design has its own demerits: lack of
standardized rules reduces the objectivity of the findings, the personal view and stand of the
researcher may induce bias in the interpretation of the data, and the findings cannot be
statistically generalized for a broader population under investigation (Creswell, 2003).

Hence, the combined methods are aimed to complement one another and gather reliable
Information to draw representative outcome and conclusion.

3.4.1 Quantitative Approach

As noted earlier a quantitative approach is one in which the investigatory primarily uses
Postpositive claims for developing knowledge, employs strategies of inquiry such as experiments
and surveys, and collect data on predetermined instruments that yield statistics data. Survey
Research provides a quantitative or numeric description of trends, attitudes, or opinions of a
Population by studying a sample of that population. Even if there are two strategy of inquiry
under quantitative approach, this study will use a survey design. Survey method is advantageous
for its merit of economy of design and it enables to gather enough information, which may not
available from other sources.

3.4.2 Qualitative Approach

Qualitative research approach is a means for exploring and understanding individuals or groups
scribe to a social or human problem (Creswell, 2009). Qualitative research is typically used to
answer questions of complex phenomena.

Thus, in the current study qualitative data is needed to address the final research objective stated
as „identifying specific areas of problem in budget utilization and controlling within the beuro of
finance

3.4.3 Sample Design

According to research scholars, sample shouldn’t be too large to be economical and shouldn’t be
too small to keep validity of findings. Accordingly this study used two sampling stages.
Therefore the researcher is to collected data from beuro of finance 60 employees (including top
management body), from Sub-cities council head of budget and finance committee plus 8 of the
committee members, from Audit Bureau Auditor general, deputy auditor general, Audit manager
and the audit team of consolidated financial statements and the researcher also collect data three
employees from each Sub cities totally the study sixty (60) respondents wants collected and
analysis the data.

3.5. Data Sources

The type of data collection method is a great value to interpret them properly. The data gathered
through primary and secondary methods were analyzed using both mixed data analysis methods.
The data collected in the course of questionnaire, analyzed and presented through descriptive
statistics such as tables, graphs, and percentages. Qualitative method of data analysis was also
employed for feedbacks obtained using open-ended questionnaires and structured interviews for
each of response given by respondents of budget user staffs and Addis Ababa City
Administration Finance and Economic Development Bureau & sub cities Budget Experts and
from Audit Bureau Auditor general in explanatory way. For possible achievement of the
objective of the paper the researcher would use both primary and secondary data, Primary data
was obtained from oral interview and questionnaire from in charge, and higher official and
observations and Secondary data was collected from These include data that have been already
collected and readily available from other sources. It covers all published such as books,
journals, statistics, financial reports & Review all available financial law, regulations, and
directives, accounting manuals, guide line and annual reports and articles and journals about
GTP, including from different books of Faculty of Business and Economics (FBE) library would
be used as a source of information to the study. 3.7.

Sampling Techniques the researcher would use judgmental sampling technique is used to gather
data. Because it was believed that judgmental sampling was more representative and appropriate
to gather the necessary data for this particular research.

3.6. Data Collection Methods

In order to gather the data, the researcher employed both open and closed questionnaires since it
is more convenient and easy to collect the required information.

Interview: the bureau of finance and economic development plan, budget, monitoring and
evaluation process owners, Sub-cities council head of budget and finance committee, Audit
manager and the audit team of consolidated financial statements & some budgetary institutional
finance officers interviewed.

Questionnaires: two types of questionnaires that one is for plan, budget, monitoring and
controlling process employee and the other for Finance core process and Modern Internal Audit
Core Process employees. The questionnaires which comprise both close ended and open-ended is
prepared in English that respondents easily understand the question and give appropriate answer.

3.7. Data Analysis

According to the researcher, the appropriate method of analysis for the study is descriptive
method. Categorization or separations of data set was also a form of analysis to make the data
easily manageable. Organizing, editing, ordering and manipulating the data were provided
descriptive information that answered questions in the problem defined. The study has attempted
to describe consistency in the analysis of data. The research employs quantitative data analysis,
such as percentage, simple tables, charts and qualitative methods.

Both ways of budget implementation and controlling practice the data analysis is based on the
reply by the respondents on their degree of agreement or disagreement with each of the
Questions on a Likert response scale (Likert, 1932) however the analysis is based on how many
responses of the respondents is close to this expected value

3.10 Expected result and output of the study

The researcher tries to enhance the economically, effectively and efficiently utilization of
budget for development and also mitigate the existing problem to sustaining rapid and equitable
growth, therefore the expected result on this study is they may be improper utilization of budget
with lack of continues controlling and taking corrective action for poor management .

To measure budget performance, they need to monitor the extent to which budget estimates
match actual results. This helps ensure financial control and identify where change is required.
Monitoring budget accuracy is the responsibility of all managers, effective monitoring of budget
performance requires that managers be provided with relevant, timely and accurate information
appropriate to their level of responsibility. It also requires managers to provide feedback in a
timely manner about underlying causes and effects of budget variations, as well as planned
actions to manage variations.

The effectiveness of internal financial reporting is likely to be enhanced when reports are
prepared for each level of budget accountability and summarized appropriately for each level of
management.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1. General overview

 In this chapter the data collected from various sources related with budget implementation and
controlling of Addis Ababa City in kirkos wereda Administration finance and economic
development office has been discussed, the researcher focuses on data analysis and presentation
in relation to a study Assessment on Budget Implementation and Controlling in Growth and
Transformation Plan (GTP) of City Government of Addis Ababa Bureau of Finance.

The data presentation and analysis the data that collected from both primary and secondary
sources was analyzed using themes from research questions and objectives.

The raw collected data from employees, officials and secondary data sources were categorized,
edited, organized and analyzed using both quantitative and qualitative methods.

The quantitative data was converted into relevant information using analysis of ratios,
frequencies and percentage; and was presented in tables and figures mainly to support the
qualitative descriptions this is the way of data analysis.

4.2. Response Rate

As it has been clearly shown in the methodology part of the research, the total sample of the
target population was sixty (60).

Based on this, the researcher has distributed the questioners related to Integration of planning
and budgeting, the challenge of the variation budget and planning, implementation and control &
performance auditing for allocated budget from beuro of finance 15 employees (including top
management body), from finance committee plus 3 of the committee members, from Audit
Bureau, accountants and internal auditors for controls for appropriately utilization of limited
resource.

The researcher 32 questioners were distributed to sixty (60) target people 57(95%) of the
respondents were filled and returned back to the researcher and 32(100%) questioners were
properly collected.

4.3. Characteristics of the Respondents

 The characteristics of the respondents are presented below as follows in terms of Generally,
characteristics such as age, gender, education level, work experience, etc. are being considered as
socio-demographics and are being asked in all kinds of surveys.

4.3.1 Gender Composition of the Respondents

Figure 4.1: Gender compositions of respondents by percent

70

60

50

40

30

20

10

0
female male

Figure 4.1

Source: Survey result 2023

4.3.2 Educational Level of Respondents

Related to their education level, it is shown in the figure 4.2 below, the majority of the 25(44%)
of them are first degree holders, while 17(30%) of them are diploma graduates. Moreover,
respondents 12(21%) are certificate 3(5%), are master’s degree and above.

This shows that most of the respondents are educated with a degree and above level of education.
This can indicate that the respondents can have a clear understanding of the item of questions
and since the education level is related to profession, we can assume that the information
provided by the respondents may be valid and reliable. Therefore, since the education level
relates to the profession and, we can assume that the information provided by the respondents
approaches to accurate result.

Sales

master
degree
diploma
certeficate

figure 4.2

Source: Survey result 2023

4.3.3 Work Experience

Concerning the work experience of the respondent shows that, 12(21%) of them have work
experience of less than 3 years, 16(28%) of the respondents have work experience of in between
3-6 years, whereas, 24(42%) of the respondents have work experience in between 7-10 years.
Finally, the other 5(9%) of the respondent has work experience above 10 years. Therefore, as
clearly indicated in the shown figure, most of the respondents, 42% have between 7-10 of work
experiences, which may have a positive impact in the total activity of the beuro of finance
because of the respondent have a lot of work experience and they know very well rather than 3-6
years‟ work experience relatively and also the others, therefore easily understand the questioners
and fill the appropriate answers budget integration with plan appropriation and actual
performance, budget utilization and controlling and auditing performance for allocated budget at
beuro of finance
 work exprience by percent
45

40

35

30

25

20

15

10

0
less than 3 years between 3-6 years between 7-10 years above 10 years

Figure 4.3

Source: Survey result 2023

4.4. Adequate understanding to prepare plan and budget

During budget preparation, trade-offs and prioritization among programs must be made to ensure
that the budget fits government policies and priorities. Next, the most cost-effective variants
must be selected. Finally, means of increasing operational efficiency in government must be
sought. None of these can be accomplished unless financial constraints are built into the process
from the very star then daily activities for budget administration rest mainly with the spending
agencies themselves. Therefore, to achieve sufficient resource allocation there should be proper
analysis of the budget preparation by spending agencies. Accordingly, regarding the proper
analysis of the budget by the spending agencies the majority of the respondents is (47%)
disagree, (33%) neutral, (13%) strongly disagree and (7%) of the respondent strongly dis agree
that public agencies analyze their budget in terms of government priority. It was also indicated
on the responses for open-ended questions that the problems in budget preparation are,beuro of
finance does not give sufficient time for budget hearing and also does not try to check whether
spending agencies are requesting budget for the plan they have.
In addition, spending agencies do not have appropriate standard and unit cost to prepare their
budget. This all have a negative effect on the preparation thus spending trend.

4.5 approving of budget according to plan

A full understanding of the budget planning and preparation system is essential, not just to derive
expenditure projections but to be able to advise policymakers on the feasibility and desirability
of specific budget proposals, from a macroeconomic or microeconomic perspective.

It is much easier to control government expenditures at the "upstream" point of budget

preparation than later during the execution of the budget. Thus, fiscal economists and general
budget advisors need to know: - what is the framework in which budget decisions are made, who
is responsible for planning and preparing the budget, what are the basic steps, how can changes
in budget plans be programmed and targeted? The nature and constitute of public expenditure
and budget differs across nations depending on economic, social, and administrative realities and
trends of the specific country. In addition: analyzing budget and expenditure demands multiple
factors to consider ,For such situation the researcher needs to understand or what look likes the
city administration of ministry of finance and economic development (beuro of finance) to
analysis the fact seven (4) questioners is forwarded as follows

Table 4.1 approving of budget according physical plan

NO Questions Strongly agree nuetra disagree Strongly mean stdevs

agree l disagree
1 The buearo of 0 14 0 22 18 18 4
finance has 0% (26% ) (41%) (33 %)
 adequate number 0%
of professionals
(budget officers)
who prepare plan
and budget
2 The beuro of 15 25 (46) 0 14 0
(28% ) (0%) (26%) (0% ) 18 6.08
finance revising
their plan
according to their
approved budget
3 In the beuro of 0 44 10 0
finance, there is a 0% (80% ) (20% 0% 27 24.04
variation of plan
with budget

4 Budget is 17 11 0 0 26
prepared based on (31% ) (20% ) (0%) (0%) (49 %) 18 7.55
reliable data and
reasonable
estimated cost

4.5.1 Availability of skilled man power to prepare the budget & plan

Man power Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for
which they are suited for the achievement of goals of the beuro of finance.

Human Resource Planning has to be a systems approach and is carried out in a set procedure.
It was also revealed from the responses for open ended questions and audit report that the main
challenges regarding skilled man power to planning and budgeting are;

 Turnover of employee
 Lack of training
 Low commitment of leadership
 Too ambitious
 Lack of momentum in the short term & Lack of rewards for best performance etc.
Therefor in this wereda there is a variation of budget with plan, the main cause of the
variation according to open-ended interviews is:- in this wereda they does not take
corrective action as the auditors recommend and suggest Budgets are too rigid and
prevent fast response Lack spending budget according to the priorities & Monitoring
and evaluation is not performed constantly etc.

4.5.2 Revising of plan according to approved budget

The majority of the respondents replied a positive relationship between the two Variables (plan
and budget) on table 4.1 an office that has plans which are systematically linked to the annual
budget does not generally make frequent plan revision in relation to budget, the respondents,
from table above, the 25(46%) ,15(28%) agree and strongly agree respectively on the other hand
14(26%) no revising of plan according to approved budget timely in both the presence of
systematic linkage between plan and annual budget and no strongly revision in finance Bureau.
Therefore, the responses were given arbitrarily without considering or knowing the real situation
of their office, or they were not voluntary to reveal the exact problem. On the other hand, the
open-ended data indicated that there were variation between plan and annual budget. According
to the respondents, due to the variation between plan and budget, they would be forced to revise
plan to include new activities.

Less attention is given to the preparations of plan and budget. The cause for the variation of
budget was mainly attributable to failing to consider the current market price at the beginning of
the budget year. As recognized from their written response, some sub cities present their annual
budget by coping simply from the previous year budget request because of inexperience. Further,
what the budget users plan does not consider the appropriated budget of the institution and
economic situation of the country.

Adequate orientation is presented rarely about plan and budget revising by the concerned
bureau. What is complained by the budget users is infrequent revision of the strategic plan (or
rigidity) periodically has put in burden on annual plan of units, Budget users are provided
additional duties (which are new and outside of the annual plan) to be executed from their budget
without supplementary funds. It, thus, produces further burden on the available budget,
According to the report revealed by the bureau of finance in 2014 E.C annually, the problems
were observed by budget users in connection with revising of plan according to approved budget
is an estimation of project expense it is never accurate and the problem is bring to at the
implementation phase.

4.5.3 The existence of matching of plan and budget

The majority of the respondents 44(80%) and 24(20%) is yes and no respectively therefor in the
city there is a variation of appropriation and spending, in the open -ended interviews and
According to the report revealed by the beuro of financed in 2014 E.C annual report, the
following problems were observed by budget users in Coordination with plan and budget
preparation for instance the following problem also addressing:-

 The plan and budget was prepared without the fully participation, discussion, and
approval of concerned units and persons. As a result, presenting exaggerated budget,
overlooking programs, excess number of budget transfer and adjustments happened
 The prepared budget did not include the relevant issues and the institution’s strategic
plan fully
 Presentation of budget demand without work plan for some extents
 Lack of Reasonable and acceptable predictable inflation
 Lack of revising budget with plan constantly etc. in such situation there is a variation of
budget and plan at the finance bureau.

4.5.4 Preparing budget reasonable & estimated cost

A good cost estimate is unbiased. It should not be made by someone who would over or under-
state the numbers.

The cost estimate should clearly define the purpose of the activities, what it will accomplish,
what assumptions are made, how long the estimate is valid, and how much the project will cost.
It should show all interested parties everything relevant, without holding back information.

The estimate should be flexible, adaptable and provide a range of the costs involved.

Cost estimates start out broad, and as various stages are completed, they are more accurately
defined in such situation wereda of finance is reasonable & estimated cost according to the
respondents.

The majority of the respondents is 26(49%) strongly disagree, 17 (31%) is strongly agree
11(20%) agree this show that such practice has resulted in preparing budget without the basis of
reasonable estimates and data. The effect was reflected on purchase process. During
procurement, budget shortage occurred at the time of bid. Moreover, the shortage of skilled
manpower or plan expert exacerbated the problem.

The respondents' answers are summarized as the follows: greater part of budget experts agreed
on the existence of weaknesses in budget preparation without reasonable and estimated cost even
though there are others who do not agree. Some of the respondents explained that some budget
users prepare their annual budget by over estimating. And they do not give priority of activities
while preparing the financial plan. Moreover, most of the time the amount of budget requested
for each item is purposely exaggerated. The main reason is they considered as the office
responsible for budget approval allocates budget by reducing some percentage from the initial
request. So that, according to their intention. In addition to this the cause for the revision of
budget was mainly contributed by failing to consider the amount of budget needed for the fiscal
year at the beginning of the budget year. On the other hand, other departments are considered
that plan is always prepared by the planning department only and they left out for themselves.
Such situation has resulted in preparing budget without the exact basis of reasonable estimates
and base line data.

4.4 Budget preparation

 Some questions were forwarded to assess the budget preparation process. The response of
budget users is shown as follows in relation to budget preparation. The summary of the response
presented in table 4 .2 below.

Table 4.2 Budget preparation response of budget users

Measurement
Items Strongly Strongly
Agree Agree Neutral Disagree Disagree Total
1 You have adequate 27(45%) 26(43.3%) 3(5%) 2(3.3%) 2(3.3%) 60
understanding to prepare budget
2 Budget of your office is 13(21.7%) 29( 48.3) 7(11.7 10(16.7 1(1.7%) 60
developed by knowledgeable %) %)
individuals
3 Budget plan of your office is 15(25%) 26(43.3%) 4(6.7% 15(25%) 60
prepared based on valid )
assumptions
4 Your office have ample time to 3(5.6%) 19(31.7%) 5(8.3% 29(48.3) 4(6.7% 60
prepare budget )
5 Public representatives/denizen 6(10%) 26(43.3%) 7(11.7 19(31.7 2(3.3%) 60
are participate during budget %) %)
preparation in your office
6 Your office prepared budget 8(13.3%) 18(30%) 5(8.3% 24(40%) 5(8.3%) 60
based on the need of the )
beneficiaries
7 The amount of budget prepared 4(6.7%) 27(45%) 6(10%) 20(33.3 3(5%) 60
for each program line item is in %)
properly over estimated
8 The budget demand preparation 13(21.7%) 34(56.7%) 6(10%) 5(8.3%) 2(3.3%) 60
of your office follows the
budget programs
9 budget is prepared for each 14(23.3%) 30(50%) 7(11.7 5(8.3%) 4(6.7%) 60
 activities in your office %)
10 There is problem of matching 20(33%) 27(45%) 0 13(24.7 0 60
plan with budget in your office %)

Source: survey results 2023

As indicated in the above table respondents were asked about the preparations of plan whether it
is related with budget or not. As shown in the above table from 60 respondents total of 41
respondents (15 strongly agree and 26 agree) agree on the existence of relation between plan
prepared with budget request. On contrary in this table shows problems of match of plan with
budget. From 60 respondents 47 of the informants (20 strongly agree+27agree) agreed about the
occurrence of problems in matching plan with budget.

According to Peters (1998), identifies weakness relate with budget planning: when there is poor
planning; little links between policy making, no strong linkage between planning and budgeting
and poor expenditure control will be result.so if there is strong relationship between plan and
budget, problems of matching of budget with plan is not expected. Besides to this questionnaire,
there were answers provided by the respondent’s for open- ended questions shown that there is
limitation to integrate plan and budget request. As the respondent stated, because of the capacity
problem sometimes there were some difficulties to assign the needed amount of budget for the
plan. Respondents also asked questions regarding budget estimations. Most of the respondents
(56.7%) agreed that budget is improperly over estimated during budget preparations. The
respondents also explained reasons about it in the open ended parts. As explained by some
informants, the main reason is they considered as the office responsible for budget approval
allocates budget by reducing some percentage from the initial request. So that, according to their
intention, if they submitted actual demand without overestimation, the amount approved for that
budget year would become less than what is expected. Most of the respondents also, stated that
the Sub Cities has no sufficient number of budget professionals who prepare budget.

As indicated in table 4.2 there are questions about the participations of concerned bodies during
budget preparations particularly denizen. 6(10%) respondents are strongly agreed and 26
(43.3%) respondents also agreed that there are public representatives during the preparations of
budget. Dissimilarly when we see the question which identifies whether budget preparation is
based on the need of beneficiaries or not, 48.3 percent (40%+8.3%) of the respondents disagreed
those Sub Cities preparations of budget based on the need of the beneficiaries. Some respondents
also stated on the written part that budget preparation is left only for budget planning
departments and concerned bodied do not participate in budget planning. According to (Irene S.
Rubin, 1999) the main starting points for the preparation of the annual budget should be a clear
definition of fiscal targets and a strategic framework consisting of a comprehensive set of
objectives and priorities. So this indicates even though there are public representatives during
budget preparation priorities are not given during preparations of each budget.

Moreover, experts and budget officers from buearo of finance identified that problems happened
during preparations of budget by budget users. Some of the problems are budget users do not
give special attention during preparation of budget, there is miss match between what they plan
with the actual one, there is tendency of submitting budget without plan, lack of highly skilled
personnel regarding plan and budget, budget requisition above the budget ceiling, budget
requests is simply copied from the previous year and this does not consider the current market
price of materials, lack of full attention and coordination within the organization. According to
Maitland (2001) the process of preparing and agreeing on a budget is a means of translating the
overall objectives of the organization into detailed, feasible plan of action.

According to the above in formations the informants provide and in general, the practice of
budget users is not on the right truck with the budget preparation principles. In addition to this, it
contradicts with what literatures mention on budget preparation. For example according to
Schiavo-Campo and Tommasi (1999) and Allen and Tommasi (2001), the main starting points
for the preparation of the annual budget should be a clear definition of fiscal targets and a
strategic framework consisting of a comprehensive set of objectives and priorities.

4.5 Budget Implementation and Utilization

Table 4.3: Budget implementation and utilization

Measurement
Strongly Agree Neutral Disagree Strongly Total
Agree Disagree
1 Your office 18(30%) 21(35%) 6(10%) 12(20%) 3(5%) 60(100%)
prepares budget
implementation
report on time
2 There is regular 15(25%) 20(33.3 4(6.7%) 18(30%) 3(5%) 60(100%)
follow up of %)
budget
implementation
in your office
3 Your office has 9(15%) 22(36.7 4(6.7%) 19(31.7 6(10%) 60(100%)
adequate %) %)
capacity to
evaluate budget
with its main
activities
4 Late start of 22(36.7%) 23(38.30 4(6.7%) 10(16.7 1(1.7%) 60(100%)
activities in %) %)
processing local
agreements
hinders the
budget
implementation.
5 There is 15(25%) 22(36.7 8(13.3%) 12(20%) 3(5%) 60(100%)
underutilization %)
of budget in
your office
6 Your office 10(16.7% ) 30(50%) 6(10%) 12(20%) 2(3.3%) 60(100%)
 presents budget
utilization
report on time
7 Budget 15(25%) 22(36.50 7(11.7%) 15(25%) 1(1.7%) 60(100%)
utilization %)
reports are
consistent with
plans
8 Your office 21(35%) 19(31.7 4(6.7%) 15(25%) 1(1.7%) 60(100%)
frequently ask %)
budget transfers
9 Your office has 15(25%) 18(30%) 7(11.7%) 15(25%) 5(8.3%) 60(100%)
the practice of
regular follow
up on its budget
utilization.

Source: survey results 2023

According to survey data from experts frequent budget transfer and accumulation of unutilized
budget were observed in Sub cities. According to Allen and Tommasi (2001), to utilize budget
successfully it depends on various factors, such as the executing capability of agencies or
institution concerned. As per the survey result, majority of the respondents in the sample have
justified that there is existence of underutilization as indicated

As indicated table 4.3 above respondents asked about the utilizations of budget of this Sub Cities
so 15(25%) were strongly agreed and 22(36.7%) were agreed that there was underutilization of
budget in this sub Cities. An overestimated budget and unrealistic projections of revenues may
lead to budget revisions during budget utilization. As it is explained from the open-ended
questions, majority of the respondents also admit occurrence of unutilized budget.
On the other hand the respondents were asked about the consistency of budget utilization with
budget plan 15(25%) and 22(36.50%) strongly agree and agree respectively. If there was
consistency of budget with its plan there should not be existence of budget difference i.e under
utilizations of budget. According to Allen and Tommasi (2001), to utilize budget successfully it
depends on various factors, such as the executing capability of the agencies or institution
concerned.

Majority of the experts and budget officer in buearo fiancé agree on the frequent asking of
budget transfer .In addition to this they also stated, because of budget is prepared without fully
participations and discussions of concerned individuals ,excess number of budget transfer and
adjustments happened. The professionals also mentioned that there is lack of skilled manpower
and experience among the driving forces that result discrepancies in budget utilization.

In general, many of the respondent’s assents that what is planed is not implemented properly,
this is because complicated procedure in procurement of items i.e. long hinders the purchasing
process at the same time, late start projects in processing local agreements hinder the budget
implementations and delay of budget release by budget holders leads to underutilization of
budget.

4.6. Budget Controlling

Table 4.4: budget controlling Responses of Budget users

Measurement
Items Strongly Agree Neutral Disagree Strongly Total
Agree Disagree
1 Budgeting
department has
means to take 14(23.3%) 32(53.3%) 8(13.3% 4(6.7%) 2(3.3% 60(100%)
corrective action )
on the weakness
of budget
implementation
2 Your Sub-City
has adequate 12(20%) 24(40%) 4(6.7%) 19(31.7%) 1(1.7%) 60(100%
internal control
audit section/unit
3 Internal auditors
of your
organization 9(15%) 14(23.4%0 9(15%) 26(43.3%) 2(3.3%) 60(100%)
Independently
conduct their
duties and
responsibilities.
4 The current
budget control 8(13.3%) 13(21.7%) 4(6.75) 25(41.7%) 10(16.7 60(100%)
system of your %)
office is
sufficient

Source: survey results 2023

As indicated in tables 4.4 above respondents were asked if there are corrective mechanisms when
weakness is face during budget implementation. A total of 46(76.6%) are agreed that there are
mechanisms of corrective action.13.3% and 10% respondents were neutral and disagree
respectively. On the other hand, majority of the respondents 36(20%) agree on the Presence of
adequate no of internal auditors. However, evidence gathered from budget, monitoring and
evaluation sub process owner in the office did not have stable human resource skills manpower
and the requirement of the position or job specification in business process re engineering (BPR)
study did not relevant criteria with the position of the requirements. This indicate that there is no
well-functioning adequate internal control system, hence affects the spending trend by either
reducing or increasing the expenditure other than real amount. The existence of internal audit
section in budgetary institutions becomes worthless unless its auditors perform their duties and
responsibilities independently. Based on this essence of auditing, respondents were asked to rate
about the independence of internal auditors.

Subsequently, majority of respondents 26(43.3%) are disagree and 9(15%) and 14(23.4%)
become strongly agree and agree respectively. This indicates the independence of internal
auditors in the sub-city becomes not as per principles. Therefore, if auditors lack independence,
they cannot perform their duties properly. Lack of proper audit will lead to failure in
implementing the budget properly. This also may lead to increase expenditures or underutilize
the budget, misusing of budget & increased transfer of budget. On the above table there is also
questions if the present controlling system of budget is sufficient or not and 35% respondents
agreed (13.3 % strongly agree and 21.7% agree) and 58.4% are disagree (16.7% strongly
disagree and 41.7% disagree) .In addition to the closed ended questions, respondents mentioned
in the open ended questions that Quarterly supervision by buearo of finance is not convenient in
order to take Quick actions on weakness of budget users and Strengthen of internal audit, and
accountability helps in controlling of budget.

The experts from buearo of finance also explain that the bureau controlled budget of budget
users using IBEX (Integrated budget and expenditure System), preparing check list and follow
up and giving trainings when gap is observed.
 4.7 performing of auditing for allocated budget

Table: 4.5 performing of auditing for allocated budget

N Questions Strongly agree nuetral disagree Strongly mean stdevs

O agree disagree
1 The bureau has adequate 29 (54%) 7 18 0 0
internal audit controls (13%) (33%) (0%) 0% 18 11
system to ensure that funds
are utilized for the intended
purpose.
2 All budgetary institutions 0 29 14 7 4
and Sub-Cities have (0%) (54% (26%) (13%) (7%) 13.5 11.15
adequate internal control )
audit section/unit.
3 Internal auditors of 7 0 18 25 4
budgetary institutions (13%) (0) (33%) (46%) (7%) 13.5 9.07
independently conduct their
duties and responsibilities.
4 Beuro of finance have 15 (27%) 23 0 16 0
enforcing mechanism to (43 (0) % (30%) (0%) 18 4.36
implement (improve) the %)
audit comments of the
Auditor General of the City
Administration of Addis
Ababa
5 Internal auditors conduct 14 0 33 7 0
performance auditing to (26% (0%) (61%) (13% (0%) 18 13.45
evaluate efficiency and
effectiveness of budget
utilization.

Source: survey results 2023

4.7.1 Adequacy of internal control Controls

Adequacy of internal control Controls can be evaluated and improved to make the city
administration of finance and economy development performance run more economically,
effectively and efficiently to use the limited resources and Internal control is the methods and
procedures within the organization established to safeguard assets, check the accuracy and
reliability of financial and other data, promote operational efficiency and encourage adherence to
the prescribed policies and procedures of the organization. In addition, it can also help to ensure
reliable financial reporting and compliance with laws and regulations. Based on the idea, the
researcher asked to rate the respondents whether there is adequate internal control or not
According the respondent, 18(33%) and 7(13%) becomes neutral and agree respectively. On the
other hand, majority of the respondents 29(54%) strongly agree on the issue. However, evidence
gathered from plan, budget, monitoring and evaluation sub process owner in the bureau did not
have stable human resource skills manpower and the requirement of the position or job
specification in BPR study did not relevant criteria with the position of the requirements. This
indicate that there is no well-functioning adequate internal control system, hence affects the
spending trend by either reducing or increasing the expenditure other than real amount.

4.7.2 Internal audit section in each budgetary institution

The existence of internal audit section helps an organization to conduct thorough examination of
the accounting process including the whole system and helps whether transactions are recodes in
a proper manner and system is operated efficiently. Accordingly, a question about existence of
internal audit section in all budgetary institutions is asked. Consequently, most of the respondent
29(54%) and 14(26%) are agree and neutral respectively on the issue. On the other hand,
respondents of 7(13%) and 4(7%) are disagree and strongly disagree respectively on the issue.
This indicate that, its existence can be contribute a lot towards the good management of public
expenditure, if it operates as per the principles of auditing and have a positive impact on the
spending trend but they are not well structured and organized .

4.7.3 Independence of the internal auditors

An „internal audit‟ can be critical to the successful operation and growth of any Bureau before
the external audit team even begins to add their value. According to the bureau Internal Auditors
“internal auditing is an independent, objective assurance and consulting activity designed to add
value and improve an organization’s operations. It helps a bureau accomplish its objectives by
bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk
management, control, and governance processes.”

The mere existence of internal audit section in budgetary institutions becomes worthless unless
its auditors perform their duties and responsibilities independently. Based on this essence of
auditing, respondents were asked to rate about the independence of internal auditors.
Consequently, majority of respondents 25(46%) and 18(33%) are disagree and neutral
respectively, on the other hand, 7(13%) becomes strongly agree on the matter and 4(7%) strongly
disagree. This indicates the independence of internal auditors in the city government becomes
not as per principles. Therefore, if auditors lack independence, they cannot perform their duties
properly. Lack of proper audit will lead to failure in implementing the budget properly. This is
turn may increase expenditures or underutilize the budget, misusing of budget & increased
transfer of budget in such situation in the bureau there is not good independence of internal
auditors there for the transaction of a bureau is affects the spending trend, Besides their
independence auditors should possess the required professional skill to perform their duties
properly. Accordingly, a question regarding the professional skill of the internal auditors was
asked to respondents show table 4.5. This indicates that internal auditor in the city government
do not possess the required skill and knowledge that enables them to perform their duties
properly. This in turn may increase expenditure of the city government than the approved budget.
4.7.4 Timely improvement the recommendations of the Auditor General

Budgeting is a cyclical decision-making process for allocating limited fiscal resources to

achieve organizational priorities and objectives over a specific time period there for they needs to
improve the audit comment on the timely basis by using systematic mechanize to follow the
budget implementation according to approved budget or not in such situation in the city
administration, Accurate and timely implementation of the recommendation of the external
auditors report eliminates waste, corrects inefficiencies and in general improves organizational
performance. Accordingly, a question whether buearo of finance has mechanism to improve
comments forwarded by the Auditor General of the city government has been asked to
respondents. Consequently, 23(43%) and 15(27%) are agree and strongly agree on the issue
respectively. On the hand, some of the respondent 16(30%) becomes disagree on the issue. In
addition, evidence from Modern internal audit core process owner, the city government has
started from Integrated Budget and Expenditure System (IBEX) had a simple mechanism to
implement as comments of the Auditor General of the City Administration, in some extents there
is lack of improvement as they recommends.

4.7.5 Conducting performance audit by internal auditors

Performance auditing is an independent auditing process aimed at evaluating the measures

instituted by management or the lack of these measures to ensure that, Resources have been
acquired economically and utilizing efficiently and effectively. According to Dittenhofer (2001),
performance auditing is a means to evaluate the efficiency and effectiveness in budget
implementation. In addition, it was indicated that performance auditing is the responsibility of
both internal and external auditors. Accordingly, respondents were asked whether the inspection
section of budgetary institutions conducts performance auditing or not. Consequently, the
majority of the respondents 33(61%) and 14(26%) are neutral and strongly agree on the issue. On
the other hand, 7(13%) becomes dis agree on the issue. If auditors fail to evaluate the efficiency
and effectiveness of public spending, this results implementers to become careless in giving
attention toward achieving the efficiency and effectiveness in public spending. This fact again
can lead toward rush yearend spending and budget to left used that affects technical efficiency
and failure to implement the projects that affect outcome thus the effectiveness.

CHAPTER FIVE

Conclusions and Recommendation

5. 1 General Overview

This chapter provides the findings and recommendations based on the stated in the objectives
and research questions. The study focused on assessment of the budget implementation and
controlling in the Addis Ababa sub city kirkos wereda in the case of finance Bureau. For this
reason, it reviewed relevant literatures and documents and collected data from the targeted
population. Therefore, during the analysis the following findings were identified basically, the
study focuses Assessment on budget implementation and controlling and identifies the
challenges that hinder the plan and budget integration, budget and expenditure, implementation
and controlling & auditing performance in the city administrational budget based on evidence
from the buearo of finance. To achieve the objectives of the study, the researcher employed
mixed research approach and used both primary and secondary data sources. This is because to
ensure the sufficiency of data and for triangulation purpose so that reliability and validity of the
findings of the research becomes enhanced. Therefore, based on the finding of study conclusions
are forwarded as follows.

5.2. Conclusions

The budget expenditure in both budget types indicated & decreasing & increasing trend all over
the study periods. The reasons for such kind of for variation budget according to physical plan
there is lack of preparing annual plan based on strategies document and also lack of reliable and
reasonable estimated cost to properly prepare the budget. In addition to this there a tendency of
submitting budget without plan However, such kind of activities is

improved from time to time in recurrent budget but in capital budget is not because of the
variance is increase in relatively to recurrent budget so there is idle budget in the cause of
Comprehensive, coordinated and adequate budgetary reporting system is not a prerequisite for
good budget implementation and controlling. In addition to other there is high budget transfer
requesting & there is no implement properly a control system that’s why some budgetary
institutions fail to submit reports timely and lack of complete recording.

based on the analysis the researcher conclude the following points.

 There has no sufficient number of budget professional during preparation of budget

 there is no ample time to prepare budget
 Budget is not prepared based on the need of beneficiaries
 There is mismatch problem budget with plan
 Late start of activities in processing local agreement hinders budget implementation
 Auditors did not conduct their duties independently

According to the result, however, the overall budgeting system misses the important participation
of concerned staffs, lack experts.
To finalize, the researcher concluded that the causes for underutilization of budget are mainly
due to lack of coordinate effort in purchasing, lack of consistency and delay in purchase
processes, incapacitated budget staffs in terms of skill and knowledge in each respective budget
offices and lack of information to evaluate budget utilization status which lead towards
underutilization of budget

5.3. Recommendation

The main intention of this project paper is to identify the fundamental causes of beuro of finance
Budget implementation and control weaknesses observed in budget users, and suggest possible
recommendations to overcome such problems. Therefore, the following recommendations are
suggested

 The expenditure management of the beuro of finance is supposed to have medium term
frame work by encouraging budgetary institutions to prepare and implement properly.
 The preparation of the budget to be based on adequate controls and professional skilled
manpower.
 Budget prepared based estimated & reasonably cost and revised budget according to their
plan.
 There should be strong supervision and control by budget holders in order to take
corrective actions on weakness.

Finally, the bureau should take all possible and remedial actions to rectify the observed
weaknesses, and to avoid repetition of the problems in subsequent years. As a result, the vision
of the institution to build competent employees with efficient cost utilization will be undoubtedly
achieved provided that its budget implementation and controlling is fully internalized among
budget integration with plan, taking corrective action, properly utilization of budget and auditing
performance and internal control in the finance bureau.

=========//========
Reference

Webster, M. (2001). Management accounting in Italy, Management Accounting:European

Perspectives. Oxford University Press, Oxford.

Andrews, M., &Hill, H. (2003). "The Impact of Traditional Budgeting Systems on the
Effectiveness of Performance-Based Budgeting: A Different Viewpoint on Recent Findings.
International Journal of Public Administration 26, no. 2.

Allen, R. and Tommasi, D. (eds) (2001) Managing Government Expenditure:

Richard Allen and Daniel Tommasi, (OECD 2001) Managing Public Expenditure

Turyakina, N. (2004). Pricing, budget management and performance. Uganda:

Makerere University

Doreen Donasian (2014). Essay, Effectiveness of budgeting process in achieving organizational

goals: a case of Temesa, University of Tanzania.

Afemikhe, S.O. (2003). The Pursuit of Value for Money. Ibadan, Nigeria Spectrum Books
Limited, 75- 162.

Mulu (2018). “Assessment of Budget implementation and Control system: A Case study of Ethio
Telecom west Addis Ababa Zone” MA Thesis St. marry University.

Ketema (2015). “Assessment of Budget Preparation and Utilization: Case of Addis Ababa City
Administration Health Bureau,” MA Thesis Addis Ababa University. Kothari

Appendix 1: QUESTIONNAIRE

Dear respondent,
This questionnaire is designed to assess on “Budget implementation and controlling in Addis
Ababa sub city kirkos”: A case study of bureau of finance. The questionnaire intends to collect
information for academic purpose only and be regarded confidential.

In order to make this study successful, the researcher kindly requests you to fill in the
Questionnaires brought to you.

1 The beuro of finance has adequate number of professionals (budget officers) who prepare plan
and budget? (A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

2 The beuro of finance revising their plan according to their approved budget? (A)Strongly agree
(B) agree (C) neutral (C) disagree (D) strongly agree

3 In the beuro of finance, there is a variation of plan with budget? (A)Strongly agree (B) agree
(C) neutral (C) disagree (D) strongly agree

4 Budget is prepared based on reliable data and reasonable estimated cost? (A)Strongly agree (B)
agree (C) neutral (C) disagree (D) strongly agree

5 You have adequate understanding to prepare budget? (A)Strongly agree (B) agree (C) neutral
(C) disagree (D) strongly agree

6 Budget of your office is developed by knowledgeable individuals? (A)Strongly agree (B) agree
(C) neutral (C) disagree (D) strongly agree

7 Budget plan of your office is prepared based on valid assumptions? (A)Strongly agree (B)
agree (C) neutral (C) disagree (D) strongly agree

8 Your office has ample time to prepare budget? (A)Strongly agree (B) agree (C) neutral (C)
disagree (D) strongly agree

9 Public representatives /denizen are participating during budget preparation in your office?
(A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

10 Your office prepared budget based on the need of the beneficiaries? (A)Strongly agree (B)
agree (C) neutral (C) disagree (D) strongly agree
11 The amount of budget prepared for each program line item is in properly over estimated?
(A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

12 The budget demand preparation of your office follows the budget programs? (A)Strongly
agree (B) agree (C) neutral (C) disagree (D) strongly agree

13 budgets is prepared for each activities in your office? (A)Strongly agree (B) agree (C) neutral
(C) disagree (D) strongly agree

14 There is problem of matching plan with budget in your office? (A)Strongly agree (B) agree
(C) neutral (C) disagree (D) strongly agree

15 Your office prepares budget implementation report on time? (A)Strongly agree (B) agree (C)
neutral (C) disagree (D) strongly agree

16 There is regular follow up of budget implementation in your office? (A)Strongly agree (B)
agree (C) neutral (C) disagree (D) strongly agree

17 Your office has adequate capacity to evaluate budget with its main activities? (A)Strongly
agree (B) agree (C) neutral (C) disagree (D) strongly agree

18 Late start of activities in processing local agreements hinders the budget implementation?
(A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

19 There is underutilization of budget in your office? (A)Strongly agree (B) agree (C) neutral (C)
disagree (D) strongly agree

20 Your office presents budget utilization report on time? (A)Strongly agree (B) agree (C)
neutral (C) disagree (D) strongly agree

21 Budget utilization reports are consistent with plans? (A)Strongly agree (B) agree (C) neutral
(C) disagree (D) strongly agree

22 Your office frequently ask budget transfers? (A)Strongly agree (B) agree (C) neutral (C)
disagree (D) strongly agree
23 Your office has the practice of regular follow up on its budget utilization? (A)Strongly agree
(B) agree (C) neutral (C) disagree (D) strongly agree

24 Budgeting department has means to take corrective action on the weakness of budget
implementation? ? (A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

25 Your Sub-City has adequate internal control audit section/unit? ? (A)Strongly agree (B) agree
(C) neutral (C) disagree (D) strongly agree

26 Internal auditors of your organization independently conduct their duties and responsibilities?
(A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

27 The current budget control system of your office is sufficient? (A)Strongly agree (B) agree
(C) neutral (C) disagree (D) strongly agree

28 The bureau has adequate internal audit controls system to ensure that funds are utilized for the
intended purpose? (A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

29 All budgetary institutions and Sub-Cities have adequate internal control audit section/unit?
(A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

30 Internal auditors of budgetary institutions independently conduct their duties and

responsibilities? (A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree

31 Beuro of finance have enforcing mechanism to implement (improve) the audit comments of
the Auditor General of the City Administration of Addis Ababa? (A)Strongly agree (B) agree (C)
neutral (C) disagree (D) strongly agree

32 Internal auditors conduct performance auditing to evaluate efficiency and effectiveness of

budget utilization? (A)Strongly agree (B) agree (C) neutral (C) disagree (D) strongly agree